0:06Skip to 0 minutes and 6 secondsMy name is Alex Trautrims. I work for Nottingham University's Business School, and I'm today accompanied by my colleague Stefan Gold, who works for Nottingham University's Business School too in corporate social responsibility. So Stefan, first question, actually, why is slavery a business topic? Slavery is very much a business topic because potentially, we can find it in every supply chain. So it's not only about trafficking, about moving people from one place to the other. It's not only about prostitution, about sex work, but it is basically about tapping cheap labor. Do businesses actually find it easier to control the supply chain closer to the point of consumption or closer to the point of production and raw materials?

0:57Skip to 0 minutes and 57 secondsFor business, it's much easier to control their direct suppliers because often, they have direct contacts. They have personal relationships that are grown over time, and they can send people there. They can do audits. They might even act in-- maybe even sometimes, they're acting in the same legal and cultural frame, but if you go rather down or up the supply chain in remote areas, like second tier, third tier, then it gets incredibly difficult to monitor slavery, to detect slavery. So would you say that it's easier to control a supply chain the less tiers we have? Well, I think you could put it this way for generalizing things. It's not always like this, obviously, because it depends very much on specific cases.

2:00Skip to 2 minutes and 0 secondsSo you can have very long supply chains that are maybe well monitored because you have some external certification body that is looking after it, for example, if you look at timber products like the Forest Stewardship Council or so. But you might also have local supply chains, like supply chains here in the UK about harvesting food, processing food, and agriculture, about retail distribution centers, et cetera, about car washes, for example, where you can directly observe maybe people working, and you might suspect, oh, are they in forced labor or not? But still, you don't know. And for business, it's quite difficult to know as well.

2:47Skip to 2 minutes and 47 secondsOK, so even if I was a business that's operating only in the UK, I would still have a risk in my supply chain, even in my local supply chain, of occurrences of slavery in it? Yeah, definitely. Definitely. Local supply chains are maybe less prone because we are living here in a quite free liberal country with good law enforcement agencies. But then you can imagine how difficult it becomes if you trade with countries where, for example, law enforcement is not working so well, where cultural norms are quite different. And you should try to set up risk maps or something like this, and you should try to detect slavery risks in those remote areas.

3:41Skip to 3 minutes and 41 secondsEvery supply chain is different to other supply chains, and so the risks of slavery in there vary a lot between them. Yeah, definitely. You have to look at specific cases, and that makes it also so difficult for companies, not because it's not just having a template, having a blueprint how to proceed. Now, you can have a bunch of indicators, and there are very good indicators about detecting slavery. But in isolation, those indicators are quite worthless. Maybe you can talk a little bit about the indicators of slavery. Slavery is different to other ethical issues that we've seen before.

4:23Skip to 4 minutes and 23 secondsSo it's different to, for example, child labor or sweatshops, which were previous ethical supply chain topics that were discussed in industry and in academia. The slavery itself-- I think the main differentiator really is that loss of freedom. So it's not just being in a terrible employment situation. It is actually about losing that freedom, losing that liberty of making your own decisions. And so how do we actually-- as a supply chain manager, how would we measure whether somebody is losing that freedom? There are a lot of different indicators that we are using. And why do we need to use indicators is actually because even very often, even slaves would not necessarily self-identify as slaves.

5:17Skip to 5 minutes and 17 secondsAnd so how do we find out that these are actually slave relationships? The indicators we could use for it is, for example, to monitor whether there are other employment opportunities for workers. So when you look at a certain region, it may be there's only one potential source of employment for workers, or they might belong to a marginalized minority, so they are actually limited in the employment opportunities that they can find. So a high proportion of migrants and minority groups in a work force could potentially be an indicator. We get stronger indicators, for example-- poor health and safety protection for the workers, which shows that there is a low value, a low economical value put on these workers.

6:15Skip to 6 minutes and 15 secondsSo there's no economical rationale to protect that value in that worker. So it's about data triangulation, triangulating sources of data, but also triangulating a variety of different indicators that would be maybe a first step for doing some sort of risk mapping, some sort of risk assessment according to geographical areas, but at the same time, also according to industry sectors. And then, I think, the next step would then be to have a look into areas where slavery can be suspected. And this would be done, for example, by audits by companies. So this is definitely like the business responsibility. But also, often companies are engaging third parties. They are engaging certification bodies for doing such audits, which is also very fine.

7:19Skip to 7 minutes and 19 secondsAlso, governments might step in. So we have a responsibility that is shared among various actors, but definitely, business is playing a major role in it. Now, the next question would be, what can we do to remediate? And I think that is actually quite a challenge for businesses. So even identifying-- we just spoke about how difficult it is for business to even detect slavery in their supply chains and identify where risks lie in their supply chain. So if we now go a step further and say a business actually just found out that one of their suppliers is using slave labor, or they even find slave labor in their own operations, what would they do?

8:06Skip to 8 minutes and 6 secondsBecause particularly, if you think about developing nations, even though slave labor relationships are terrible, but they still may be the only opportunity for those slaves to actually feed their family. And so the ethical problem for businesses is then, actually, are we making their life even worse if we just purely withdraw from a certain region? So I think one thing that businesses really need to do is actually something that we call supplier development. So they need to actually work with their suppliers and with their supply chain to develop them into being better in detecting slaves and also helping them, setting up mechanisms for victim protection and also for development.

9:06Skip to 9 minutes and 6 secondsAnd that problem can actually lie in very different parts of that supply chain relationship, so it may be that that supplier so far just hasn't been aware that slavery is an issue. It might be that that supplier is actually not willing to change its practices. Maybe they have been using slave labor for a long time, and that's what they prefer to do in their business model. And if they're not willing to develop, then yes, clearly, a business needs to eventually withdraw from using that supplier. But it could also be what you mentioned earlier, that supply chains act across different legal and cultural systems. So other countries will have different legal and societal norms.

9:58Skip to 9 minutes and 58 secondsSo if the problem actually lies in that a local community finds it acceptable to use slave labor, then a business may actually need to do much more than just working with the supplier. They actually may need to work with the community that those slaves live in and to actually make it a socially unacceptable practice to enslave people. And it might even go further, where businesses may have-- particularly if they are large businesses that have economic and also political power, they may actually have to engage with governments to speak about law enforcement. Who is actually helping these victims? Who can these businesses actually contact when they identify slaves?

10:57Skip to 10 minutes and 57 secondsSimilarly to actually the issue of slavery being quite individual to individual supply chains, also, the solution probably needs to be tailored to the occurrence of slavery, and particularly whether it's a systematic occurrence or if this is an individual case. So I thought it's quite interesting to see when you said, well, when we talk about slavery, often it's a question of life and death. Now, it is a question of survival, so it is no real solution just withdrawing our sourcing activities from one certain area, not because in a way, other companies might just take over the part you have been sourcing before.

11:47Skip to 11 minutes and 47 secondsAnd at the same time, you might hurt very much the entire region, not only those slavery communities, let's say. So I think it's quite important, really, to underline what you said before, that it's not only about business. It's also about other actors. And if you have a look at examples that worked quite well, we have seen, or we see, that they are often multi-stakeholder initiatives, like for example the International Cocoa Initiative, ICI, founded in 2002. This works quite well. And there, we have representatives of governments, of companies, of workers, of NGOs, of international organizations, and they all work together, and they use synergies.

12:43Skip to 12 minutes and 43 secondsThey increase legitimacy, and they are able to create a base and a platform where resolutions can be found. Absolutely. And I think one point that is really, really important to make in this is that I think as a general public, we often believe that it's very easy to just switch suppliers. So if we find a supplier that's using slave labor, we just find a better supplier that's not using slave labor in their production. But actually, for a modern, complex supply chain, it's not really that easy. There may be not that many suppliers who are actually capable of producing what we need in a particular quality and in a particular quantity.

13:34Skip to 13 minutes and 34 secondsSo when you think about particularly a lot of the mining that's going on in central Africa, well, there's a lot of pressure from the Western world to actually reduce and eradicate slavery from those supply chains. But if you don't want to change as a supplier, you could just decide to sell your minerals to a Chinese company instead. So moving supply chains in a modern world is actually much, much more difficult, I think, than most people anticipate. And I think also, often, it is exaggerated the sway, the power Western-- or let's say companies in developed countries have. They are held accountable by civil society for many things.

14:26Skip to 14 minutes and 26 secondsBut basically, as you said, they have a lot of purchasing power, without question, but they have very little knowledge about what is going on in places that are culturally different, different in terms of politics, of socioeconomic structures, et cetera. Using companies and their purchasing power to eradicate slavery is really, really crucial to the solution, but businesses can't do the job alone. They need other actors like governments, law enforcement, NGOs, and also their customers and suppliers to actually work with them on a solution. Definitely. And we have seen already that, for example, one major partner in this battle is already moving forward, governments.

15:22Skip to 15 minutes and 22 secondsWe have had this Modern Slavery Act in the UK just last year in 2015, and we had, for example, already before, the United States-- the California Transparency in Supply Chains Act that is really setting a frame for companies to act in this direction and that is also setting a frame for companies and increasing the stakes for them, in terms of that their employees can be prosecuted, that there might be additional risks of litigation that had not been there before. And all of this, I would say, in addition to maybe the worst and the highest risk, like the risks of reputational damage to the brands.

16:12Skip to 16 minutes and 12 secondsYeah, and I think that's why we can very often actually see that companies who are either directly affected by legislation-- so for example, mining companies who operate in conflict zones and the area of conflict minerals, and those big brands manufacturers who are actually very, very varied about their reputation and customers buying their products, high school employees maybe not wishing to work for them anymore because they're being perceived as unethical. So those are probably the companies that are leading the way from a business perspective because the risk is much, much higher to them, both from a litigation prosecution perspective and from a reputation damage perspective.

17:03Skip to 17 minutes and 3 secondsAnd I think the Modern Slavery Act and the California Transparency Act actually-- they're only really the first supply chain legislation acts that came up. I think businesses can actually use modern slavery as a topic for future ethical issues that will arise in supply chains, so there may be a lot of other topics that we are not as highly aware of-- for example, the use of water in local communities, land theft. There are plenty of other topics that may be coming up in the future, and supply chain managers need to prepare their organizations for eradicating modern slavery, but also maybe using the same mechanisms for other ethical issues that will arise in the future.

Made in a Free World

Dr. Stefan Gold and Dr. Alexander Trautrims are leading experts on slavery in supply chains.

In this film, they discuss the business solutions to ending slavery, including industry-wide initiatives. Contemporary slavery often hides behind business mechanisms such as debts and contracts. At the same time, the UK has passed the Modern Slavery Act which requires businesses with a turnover of more than £36 million to produce regular reports on their efforts to eradicate slavery from their supply chains. Stefan and Alex debate whether this and other new legislation will make businesses address the question of slavery in their goods and products, and what responsibility corporations have for making their supply chains slavery-free.